Thanks to the Department of Justice's Nov. 19 shakedown of JPMorgan Chase, credit unions won't pay a 2014 corporate assessment. The $1.4 billion payout to the NCUA will be used to pay down the remaining $3.9 billion outstanding Treasury line.

Should the housing market take a nosedive before the securitized legacy assets mature in 2021, credit unions may have to pay an assessment. But for now, the estimated range remaining to repay the corporate stabilization effort includes a surplus of $200 million at the cheap end. The high end of the new estimate is just $1.6 billion, down from $3.2 billion as of the last estimate in fourth quarter 2012.

With suits against Wall Street banks still remaining, and the possibility of more settlements to come, this is good news for credit unions.

I can almost see all the credit union CEOs and CFOs doing happy dances from here. Woot! Woot!

As if the assessment news wasn't exciting enough, the meeting revealed a couple of juicy tidbits that should be of interest to credit unions.

First was the revelation that 2014’s capital acquisitions include $1.6 million to build out a top-secret room at NCUA headquarters. The room was mandated by an executive order signed by President Obama, requiring such facilities at all federal agencies. The NCUA is behind the curve on this requirement, and is one of the last agencies to build the room.

The idea that the NCUA would need such a room is ridiculous. What kind of top secret information might the administration need to share or retrieve from a credit union regulator?

The NCUA was able to manage the seizure and liquidation of five corporate credit unions without such a hideout, failures so large they threatened to topple the entire industry. I’ll knock on wood as I type this, but what could top that?

Given the bad press this administration has received regarding the NSA and other secrecy issues, this is a bad PR move. And the budget implications won’t be popular, either.

The top-secret room was pressed as an issue by Board Member Michael Fryzel, who also grilled staff on another sketchy topic during the meeting: accounting for the costs of implementing the new CUSO rule.

Rather than be funded out of the operating or capital budget, the CUSO rule’s $750,000 system development price tag will be charged to the NCUSIF.

The NCUA didn’t try to hide this fact. In the rule’s Board Action Memorandum, the NCUA clearly wrote that “per Section 203 of the Federal Credit Union Act, actual expenses will be charged to the NCUSIF.”

However, the point was glossed over until Fryzel brought it up during the meeting.

While the CUSO rule, like most regulations, is meant to protect the share insurance fund, seems to me the cost should come out of the operating budget, just like costs to implement and enforce other rules.

The agency appeared to attempt to play a shell game by not including the costs in the budget. Given that the NCUA has been criticized for scrapping the budget hearing process, this was not a smart move.

I’m told the agency plans to pay for the proposed stress testing rule in the same way. If you’ll recall, if approved, that rule could cost up to $1 million dollars per credit union to implement. There are currently four credit unions with more than $10 billion in assets…soon to be five, once SchoolsFirst FCU crosses that threshold…which would be subjected to stress testing.

While $5 million is a drop in the bucket compared to the NCUA’s total $268 million budget, it would be noticed as an annual increase. Had Fryzel not pushed the issue at the board meeting, that $5 million might have slipped through the NCUSIF income statement relatively unnoticed.

Possibly, the move is meant to appease trade associations that are pressuring the agency to keep the operating budget as low as possible. But if assessed through an NCUSIF premium, credit unions would have to pay the tab anyway. I can’t imagine this news will help build trust and communicate agency transparency to the nation’s federally insured credit unions.

Credit Union Times will further investigate both of these revelations in the coming weeks.

But until then, let’s give thanks that the corporate assessment era is finally over.